Parag Milk Foods eyes expansion after IPO approval

Parag Milk Foods, the Indian dairy business, has received clearance from the Security Exchange Board of India for its IPO.

The company intends to raise US$180m from the IPO, which is scheduled to hit the market within a year.

Speaking to just-food, a source at Parag said the funds raised from the IPO will be used for expansion and cutting down debt.

However, the source refused to be drawn on Parag's expansion plans or on how much debt the company intends to pay down.

The company operates two plants, one at Manchar in Pune and another at Palamaner in Chittoor in Andhra Pradesh.

In an interview with The Hindu newspaper published today, Parag chairman Devendra Shah said the group plans to expand production at the two plants.

Shah also said Parag plans to set up another facility to produce milk-based beverages and invest in its Bhagyalaxmi Dairy Farm subsidiary.

Motilal Oswal Private Equity, another buyout house, IDFC, and the International Finance Corporation, the investment arm of the World Bank, are investors in Parag. Shah is expected to remain the company's majority shareholder after the IPO.

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